RUSS BERRIE AND COMPANY,
INC.
Date of Grant:
__, 20____
STOCK OPTION
AGREEMENT (the “Agreement”), dated as of the date set forth above, between
Russ Berrie and Company, Inc., a New Jersey corporation (the
“Company”), and the individual whose name appears on
the signature page hereof (the “Optionee”).
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1.
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Confirmation of Grant; Exercise
Price. The
Company hereby confirms the grant to the Optionee, effective as of
the date set forth above, of stock options (the
“Options”) to purchase
shares of the Common Stock, stated value $0.10 per share, of the
Company (“Common Stock”) at an exercise price of
$___________ per share (the “Exercise Price”). The
Options granted hereunder are issued under and subject to the terms
and conditions of the Company’s Equity Incentive Plan (the
“Plan”), which is incorporated into this Agreement by
reference, and the terms and provisions of this Agreement. Unless
otherwise defined in this Agreement, capitalized terms used in this
Agreement shall have the meanings ascribed to them in the Plan. If
there is any conflict between the provisions of this Agreement and
the Plan, the provisions of the Plan will govern. The Optionee
acknowledges receipt of a copy of the Plan. The Options granted
hereunder are intended to be non-qualified stock
options.
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2.
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Vesting and
Exercisability . Except as provided in
Sections 3 and 5 below, the Options shall vest and become
exercisable ratably over five years (20% per year), commencing on
the first anniversary of the Date of Grant. In no event may a
vested portion of the Options be exercised later than 10 years
from the Date of the Grant, however, the term of exercisability of
a vested portion of the Options shall be subject to the provisions
of Section 3 below. Subject to the terms of the Severance
Plan, when a portion of the Options are no longer exercisable, they
shall be deemed to have lapsed and terminated.
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(a)
Disability, Death or Retirement . Notwithstanding
Item 2 above, if the Optionee: (A) becomes Disabled; or
(B) dies while employed by a Participating Company, his or her
outstanding unexercised Options, whether or not vested and/or
exercisable on the date of the applicable event, shall become fully
vested and exercisable, and may be exercised by the Optionee, or
his or her legal representative, estate, legatee(s) or permitted
transferee(s), as applicable, for up to one year after the date of
such Optionee’s Disability or death, as applicable, or the
remaining term of the Option, whichever period is shorter.
Notwithstanding Item 2 above, if the Optionee Retires, his or
her outstanding unexercised Options, to the extent vested and
exercisable on the date of such Retirement, may be exercised by the
Optionee for up to one year after the date of his or her Retirement
or the remaining term of the Option, whichever period is
shorter.
(b) Other
Termination . Notwithstanding Item 2 above, and subject to
the last sentence of this clause (b), if the Optionee’s
employment with a Participating Company terminates for any reason
other than Disability, death or Retirement, his or her outstanding
unexercised Options will be cancelled and deemed terminated as of
the date of termination; provided, however, that if the
Optionee’s employment is terminated by a Participating
Company for reasons other than Cause, his or her outstanding
unexercised Options, to the extent vested and exercisable on the
date of termination, may be exercised within 90 days after
such termination, or the remaining term of the Option, whichever
period is shorter.
(a) The
Options shall be exercised by giving written notice of exercise to
the Chief Financial Officer of the Company at the Company’s
principal executive office, which shall specify the number of
shares of Common Stock to be purchased. The exercise price of the
Options shall be paid in cash or, in the sole discretion of the
Committee: (a) by the delivery of shares of Common Stock of
the Company then owned by the Optionee; (b) by directing the
Company to withhold shares otherwise deliverable upon exercise to
satisfy the exercise price; or (c) by delivery of a copy of
irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds to pay the exercise
price, as long as such transaction is not impermissible under
Section 13(k) of the Exchange Act (Section 402 of the
Sarbanes-Oxley Act of 2002). To facilitate the foregoing, the
Company may enter into agreements for coordinated procedures with
one or more brokerage firms. The Committee may prescribe any other
method of paying the exercise price that it determines to be
consistent with applicable law and the purpose of the
Plan.
(b) The
Options may be exercised only with respect to full shares of Common
Stock. Notwithstanding any other provision of this Agreement, the
Options may not be exercised in whole or in part: (i) unless
all requisite approvals and consents of any governmental authority
of any kind having jurisdiction over the exercise of the Options
shall have been secured; and (ii) unless the issuance of
shares of Common Stock upon the exercise of the Options shall be
exempt from registration under applicable U.S. federal and state
securities laws, and applicable non-U.S. securities laws, or the
shares of Common Stock shall have been registered under such laws.
As a condition to the exercise of this Option, the Company may
require the Optionee to make any representation and warranty to the
Company as may be required by applicable laws, rules or
regulations.
(a) The
Options or this Agreement shall be subject to adjustment or
substitution, as determined by the Committee in its sole
discretion, as to the number, price or kind of a share of Common
Stock or other consideration subject to the Options, and any and
all other matters deemed appropriate by the Committee, including,
without limitation, accelerating the vesting, settlement and/or
exercise period pertaining to the Options, or as otherwise
determined by the Committee to be equitable, in the event of:
(i) changes in the outstanding Common Stock or in the capital
structure of the Company by reason of a dissolution or liquidation
of the Company, sale of all or substantially all of the assets of
the Company, mergers, consolidations or combinations with or into
any other entity if the Company is the surviving entity, stock or
extraordinary dividends, stock splits, reverse stock splits, stock
combinations, rights offerings, statutory share exchanges involving
capital stock of the Company, reorganizations, recapitalizations,
reclassifications, exchanges, spin-offs, dividends in kind, or
other relevant changes in capitalization; or (ii) any change
in applicable laws or any change in circumstances which results in
or would result in any substantial dilution or enlargement of the
rights granted to, or available for, participants in the Plan, or
which otherwise warrants equitable adjustment because, in the sole
discretion of the Committee, it interferes with the intended
operation of the Plan. Any adjustments under this Section 5
shall be made in a manner which does not adversely affect the
exemption provided pursuant to Rule 16b-3 under the Exchange
Act and which otherwise is permissible under Code
Section 409A, if applicable. The Company shall give the
Optionee notice of any adjustment hereunder and, upon notice, such
adjustment shall be conclusive and binding for all
purposes.
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(b) In
connection with a Business Combination, the Committee, in its sole
discretion, may provide for: (i) the continuation of the Plan
and/or the assumption of the Options granted hereunder by a
successor corporat
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